KDDC May/June 2019

KENTUCKY

May - June w w w. k y d a i r y. o r g

Milk Matters Help Reduce Heat Stress

page 12

The Kentucky Value Added Conference

page 16

Dairy Revenue Protection

page 22

Tom Hastings presents a new fishing pole to Maury Cox (right) for his retirement.

Supported by

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

2019 KDDC Board of Directors & Staff

President’s Corner Richard Sparrow

A

ll milk marketing indicators are predicting muchimproved milk prices for the second half of 2019, probably in the area of $2.00 CWT over the first half of the year. While some would say this is not enough, it is still a substantial improvement.

Executive Committee

President: Richard Sparrow Vice President: Charles Townsend, DVM Sec./Treasurer: Tom Hastings EC Member: Tony Cowherd EC Member: Freeman Brundige EC Past President: Bob Klingenfus

Board of Directors

District 1: Freeman Brundige 731.446.6248 District 2: Josh Duvall 270.535.6533 District 3: Keith Long 270.670.1388 District 4: Bill Crist Jr. 270.590.3185 District 5: Tony Compton 270.378.0525 District 6: Mark Williams 270.427.0796 District 7: Greg Goode 606.303.2150 District 8: Steve Weaver 270.475.3154 District 9: Jerry Gentry 606.875.2526 District 10: Richard Sparrow 502.370.6730 District 11: Stewart Jones 270.402.4805 District 12: John Kuegel 270.316.0351 Equipment: Tony Cowherd 270.469.0398 Milk Haulers: Alan Wilson 606.875.7281 Genetics: Dan Johnson 502.905.8221 Feed: Tom Hastings 270.748.9652 Nutrition: Dr. Ron Wendlandt 502.839.4222 Dairy Co-op: Justin Olson 765.499.4817 Veterinary: Dr. Charles Townsend 270.726.4041 Finance: Michael Smith 859.619.4995 Former Pres.: Bob Klingenfus 502.817.3165

However, there are many factors outside our control that reverse these trends before they become real in our milk checks. Dairy farmers have, or will have very soon, some new tools to protect their milk price and margin. Dairy Margin Coverage (DMC) program is a new, revamped version of the old Margin Protection Program (MPP-Dairy). DMC is a federal program offered by USDA. Once enrollment opens, you will have 90 days to make your margin selections at your local FSA office. The Livestock Gross Margin for Dairy Cattle Program (LGM-Dairy) is also still available as a margin coverage option.

Finally, there is the new Dairy Revenue Protection (Dairy –RP) Program, a crop insurance program that protects minimum milk revenue for dairy producers.

So, while it looks like milk prices will improve, I urge you to learn as much about these programs as you can. You can protect your operation and livelihood, and still enjoy any upside that occurs. .

Employee & Consultants Executive Director: H.H. Barlow 859.516.1129 DC-Central: Beth Cox 859.516.1619 • 270-469-4278 DC-Western: Dave Roberts 859.516.1409 DC-Southern: Meredith Scales 859.516.1966 DC -Northern: Jennifer Hickerson 859.516.2458

KDDC

176 Pasadena Drive Lexington, KY 40503 www.kydairy.org KY Milk Matters produced by Carey Brown

May - June 2019 • KDDC • Page 2

Top Seller and Junior Champion of the Brown Swiss Show belonged to Fairdale Thunderstruck Waggy at $9,000. Purchased by Attie Taylor, KY and Consigned by Fairdale Farm, KY

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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Executive Director Comments H H Barlow

I

am very excited to be chosen as the new executive director for KDDC. My entire life has been wrapped up in the dairy industry and I owe the dairy cow a tremendous amount. I am very passionate about dairying and will give my energy and effort to improve conditions in our dairy industry.

Since KDDC’s inception in 2005, the directors who have served on our board have provided great leadership. Moreover, for the last 12 years, we have seen great work by Maury Cox as executive director. I salute Maury for his effort to better our industry and wish him well in retirement.

KDDC has accomplished much in its brief history. At its formation, there was a real need for improved production per cow and higher quality milk. Through our programs, we have been successful in positively changing our production and milk quality significantly. With many herds in Kentucky enjoying a 30,000 lb herd average, we don’t have to take a back seat to any state in our quality of dairies. KDDC has truly become the advocate for Kentucky’s dairy industry.

However, with our successes, we have seen many negative changes to our dairy businesses in Kentucky. After the highest pay prices in history in 2014, we have endured 4 years of depressed prices. As a result, serious erosion in the financial health of Kentucky dairy farmers has caused several hundred dairymen to cease milking. This has not only affected every individual farmer, but all of our allied industry has suffered the loss of customers. Along with us as dairymen, just think what the loss of dairy farms has done to our rural communities.

When each cow contributes $4,000 worth of sales off the farm, it’s not hard to understand the impact it has had in our rural counties. Dairy farmers spend all their money locally. It’s not like a factory whose owners live in Japan, where profits go overseas.

With these problems we have all experienced, now is the time to unite as an industry, be positive in our attitude and actions, and view our challenges as opportunities for the future.

I feel like our KDDC focus for the future has to concentrate

May - June 2019 • KDDC • Page 4

on stabilizing our dairy market. We should never again face what happened a year ago, when 20 dairymen didn’t have a place to sell their milk. Seventeen of those dairymen have liquidated their herds. This is a personal, community, and industry tragedy.

My desire is to pursue programs and initiatives to improve our markets, which will improve the profitability of Kentucky dairymen and our industry partners. We will strive to work with GOAP to create new programs that will benefit everyone. We will pursue initiatives such as federal order reform by partnering with all southern states to change the rules, whereby, more value will be given to milk produced locally. For example, on federal order reform, we believe that the touch-base requirements and transportation credits are unfair and have harmed every southern farmer’s milk check. We also plan to improve relations with processors. Working with our processors, we can create new products and new markets for Kentucky milk. Another example, most flavorful coffee creamers are made with nondairy…That has large consumer potential. How does Kentucky bourbon butter sound?? Obviously, KDDC will work with our promotional organizations to get more product moved. In addition, dairy labor is a challenge for almost every dairy farm.

We will lend our voice alongside other states to implement a dairy guest worker program. This will be just one effort along with other reforms we hope to address through legislation. These initiatives may seem like big ideas and will take time, patience, and a lot of work, but they are worth the effort for ALL of us.

In summation, better times are immediately ahead for our Kentucky dairymen. The all milk price has climbed over $1.80 since this time last year and May’s Class III futures are $.70 higher than April. On June 17, all dairymen can sign up at your local FSA for dairy margin coverage created by the 2018 Farm Bill. It is imperative that all dairymen take advantage of this new program. The payout for the first three months will more than cover your premiums.

I’ve been on the job 30 days. As I have traveled around to different meetings, events and farm visits, the feedback has been positive, encouraging and motivating. The ideas listed above are only a start. I need everyone’s ideas and suggestions on how KDDC can better serve the total industry. It has been great working on your behalf with our four dairy consultants.

They have a wealth of knowledge and experience that will be a valuable asset as we move forward. Your KDDC team will strive to put action to our collective ideas.

I hope to continue to bring good news to our Kentucky dairy industry and I promise the KDDC team will work tirelessly to improve the state of dairying in Kentucky.

Mill Wheel Dairy Show Clinic Friday, June 28, 2019 Casey County Fairgrounds Liberty, KY 9:15

Registration

9:30

Fitting Tips for the Show Ring

10:15

Showmanship Demonstration

10:30

Beginner Showmanship Coaching 1 on 1 with your heifer

11:00

Intermediate Showmanship Coaching 1 on 1 with your heifer

11:30

Advanced Showmanship Coaching 1 on 1 with your heifer

12:00

Lunch break

1:00

Washing demonstration

1:30

Weaver Product Give-Away!

Afternoon

Extra help abailable for fitting and showing questions

For more information contact Skylar DeGroft at sdegroftbscba@gmail.com Mill Wheel Dairy Show Clinics: your direction to the winners circle!

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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Food for Thought… What Does It Cost You to Raise a Dairy Heifer from Birth Through Calving?

Donna M. Amaral-Phillips, Ph.D, University of Kentucky Extension Dairy Nutritionist

R

ecently, I asked a group of dairy farmers this very question. Their immediate response was—a whole bunch. After this ice breaker in the conversation, it became very evident that some had calculated this investment in the future productive units for their herds, whereas others had not calculated the cost for raising heifers separately from the entire milking operation, or not at all.

Raising replacement heifers represents a huge expense and often times 15 to 20% of the cost to the entire dairy operation.

When calculated separately from lactating cows, recent estimates have placed the cost to raise a heifer from birth through calving at $1400 to $2000+. An individual farm’s cost estimate will depend not only on costs associated with purchased feeds, veterinary supplies, and breeding to name a few, but also whether costs associated with housing and feeding facilities (depreciation costs), manure management, home-grown forages, management (unpaid or family) labor, and whether hired labor costs were included or split out from the milking operation. Over the years of cost tightening, most costs paid directly from the farm checking account have been contained. The question now becomes; how can costs associated with raising replacements be kept in line for the greatest return? In other words, what are the biggest drivers behind dairy heifer rearing costs?

Feed Cost Post-Weaning

Generally speaking, approximately half the cost for raising heifers is associated with the cost of purchased and home-grown feeds. It would stand to reason that a savings in this category would reduce the cost associated with raising a heifer from birth through 24 months of age. When evaluating feed costs of older heifers, the largest cost per pound of feed is associated with grain versus home-grown forages. If you could improve forage quality or balance rations which results in a reduction of the amount of grain being fed, a savings would be realized. For example, assuming that forage quality improved for a two-year period and you could feed 2 lbs less grain to heifers from 6 to 22 months of age, a net savings of $83/heifer raised would result (Calculations assume a savings of $122/heifer for grain purchased at $250/ ton and an additional cost of $39 associated with the additional hay consumed when valued at $80/ton). Translating this to a 100-cow herd where 20 heifers are from 6 to 12 months of age and another 40 heifers are from 1 to 2 years of age, the savings would be $3104 yearly.

Costs Associated with Improved Growth as Baby Calves

Feeding additional milk or milk replacer results in additional growth during a timeframe when calves use feeds efficiently

May - June 2019 • KDDC • Page 6

for growth; however, as expected, daily cost does increase.

For example, assuming the calf is fed double the amount of reconstituted milk replacer or milk (2 vs 4 quarts twice daily) with a higher protein content, total costs may increase by approximately $110/calf. But, when more milk /milk replacer is fed, weight gain may double or increase by almost 1 lb per day. This improvement in weight gain has been correlated with increased milk production later in life. The question then becomes, how much more milk production is needed to generate a return on this investment? Assuming a milk price of $18 and she calves 0.5 months earlier, she would have to give 600 to 850 lbs more milk or approximately half of the improvement in production seen in multiple research studies. With these expected rates of gain, cost per pound of gain decrease from around $4/lb gain daily to less than $3/lb gain. Thus, calves fed more milk use your feed dollars more efficiently, resulting in growth. The key is to not lose this additional gain at or after weaning.

Watch Age at First Calving

Heifers that calve in older increase heifer raising costs. Daily costs for older heifers are higher since total feed costs are higher and have been estimated at approximately $2/day or an additional $60/month past 24 months of age. For our example 100-cow herd calving 40 heifers yearly, that is $2400/additional month-of-age when the average age of calving is greater than 24 months of age. Thus, from an economic standpoint, it behooves one to get them bred in a timely manner so that they calve and enter the milking herd by 24 months of age.

Although calving at 24 months of age saves daily maintenance costs, other reasons exists for extending the age at first calving past 23 to 24 months of age. Some milk markets penalize farmers for overages from a base production or for a spring flush of over production. Thus, depending on one’s situation, it may make sense to redistribute the number of heifers calving each month, thus holding back heifers to calve at an alternate time, to better equalize production month to month as well as milk income per month. The key is to understand that this practice is not “free”, and have an appreciation as to what it is costing your dairy operation.

Raise the Appropriate Number of Heifers

In order to maintain herd size, an adequate number of heifers needs to be raised on farm, contracted or purchased. Heifers represent an investment into the future productive units of the herd and a sizable outlay of capital. For our 100-cow example herd calving 40 heifers yearly, these heifers represent $56,000 to

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

$80,000 investment and for each heifer raised over those needed it costs an additional $1400 to $2000. Raising 5 more heifers than needed increases rearing costs by an additional $7000 to $10,000. When raising heifers, the key is to have enough, but not more than needed which can easily occur with the use of sexed semen. If you have already culled out the least profitable mature cows, these extra heifers are using financial assets that can be diverted elsewhere. In the past, extra heifers could be sold for a profit, but in today’s market that profit may or may not be realized. The key is to frequently review the number of heifers being raised, future needs, and adjust the numbers to reflect your projected future needs.

Heifers represent the future profit-generating assets for a dairy business as well as a sizeable investment of capital. To ensure that these financial assets are used wisely and heifers are available to replace culled cows as needed, dairy business managers need to review feed costs, weight gain, weight gain per unit of feed intake, age at calving, and whether the appropriate numbers of heifers are being raised to see if they are on target for the goals of the dairy. With profit margins very tight, evaluating dairy heifer rearing programs are as important as reviewing costs and income generated by the dairy’s milking herd.

The Bottom Line

May - June 2019 • KDDC • Page 7

TECH TALK: NUTRITIONAL MANAGEMENT FOR HEAT STRESS IN DAIRY COWS Heat stress is a major challenge for dairy cows in many parts of the world, especially where summer temperatures are long- lasting. Cows begin to experience heat stress when the temperature-humidity index (THI) rises above 70. Heat stress can cause decreased productivity and fertility, which ultimately translates to significant economic losses.

How heat stress affects animal physiology and performance Cows are susceptible to heat stress because of the significant heat increment (fermentation and metabolism) generated by high feed consumption and milk production. This susceptibility is exacerbated by the fact that cattle sweat at only 10 percent of the rate humans do. A cow’s physiological adaptations to heat stress include altered blood flow distribution toward the peripheral tissues, an altered endocrine system and energy metabolism, increased respiration rate, sweating, panting, drooling, and reduced milk yield and reproductive performance.

Panting is important for cattle, as it helps dissipate the heat that remains because of their limit ed capacity to sweat. Excessive panting, however, may affect the acid- base balance and raise blood pH, leading to respiratory alkalosis. Additionally, drooling animals will losesaliva - and, along with it, its buffering capacity - which can cause rumen acidosis. Behavioral adaptations to heat stress include changes to drinking and feed intake levels, increased standing time and decreased activity and movement.

Altogether, these changes can have implications for impaired rumen function and hoof and udder health.

Lactating dairy cows are more sensitive to heat stress than dry cows due to their higher metabolism, which helps them meet lactation demands. However,dry cows and heifers are still subject to the negative effects of heat stress. Low feed intake is an immediate coping strategy, but this can result in lower milk yield and components. The activation of the thermoregulatory system further aggravates the energy balance and the decrease in milk and reproductive performance. Depending on the severity of the heat stress, milk yield can decrease by more than 25 percent (NRC, 19 89). Heat -stressed cows are also less likely to become pregnant; fewer than 20 percent of inseminations during these periods result in pregnancies (Rot h et al, 2000).

Management strategies for combatting heat stress The first step to abating heat stress is to make the cow’s environment more comfortable by providing shade, cooling, ventilation, and ample, clean and accessible water. The primary focus of the nutritional management of heat stress should be sustaining rumen health and function. Adjusting feeding schedules so they coincide wit h the times of th e day when temperatures are the lowest should encourage cows to eat more. Additionally, since feed intake is depressed, increasing the density of the ration by feeding more grains or fats may be advisable. Compared to forages, grains and fats are known to create less heat during digestion.

These strategies should be implemented with caution, however, as heat -stressed cowsare already at risk for rumen acidosis, even at lowfeed intake levels. Rumen - protected fats should be fed to avoid further depress ion of fiber digest ion and milk fat. Feeding high -quality forages during times of heat stress is another strategy for minimizing digestive heat. The digestion of protein in the rumen results in heat production and, thus, should be limited by providing good -quality bypass protein and slow-re lease urea products. Buffers and minerals, such as potassium, sodium, magnesium and chlorine, should be balanced so that what is lost through saliva and sweat can be replenished.

Cows experiencing heat stress are more prone to subacute ruminal acidosis because of changes in their feeding behavior (e.g., fewer and larger meals, slug feeding) and because of the tendency to feed a high-grain ration. Several feed additives - such as fat-soluble vitamins, B-vitamin s, niacin, chromium, selenium and direct-fed microbials like Aspergillus oryzae and yeast - may imp rove immune and antioxidant systems, energy utilization and rumen function during heat stress .

Yea-Sacc®1026, a live yeast derived from Saccharomyces cerevisiae,a proprietary yeast strain from Alltech , has been proven to stabilize rumen pH, stimulate microbial growth, enhance fiber digestion and increase animal performance, all of which are negatively impacted during heat stress. Yeast can effectively increase rumen pH by stimulating fiber digestion and lactate -utilizing bacteria, leading to regular feed consumption and more efficient rumen fermentation. Supplementing YeaSacc1026 to dairy cows year-round has result e d in higher fee d intake and milk yield and protein and fat yield - and those responses were even greater during the sum mer months (Formigon i e t al., 2005; Kravale et al., 2005).

In conclusion, to minimize the effect s of heat stress on lactation and reproduct ion performance, producers must take an integrated approach that includes cooling, access to water and adjustments to the ration. Utilizing a feed additive such as YeaSacc1026 can be an effective tool for mitigating the negative effects of heat stress on rumen function and productivity. Alltech offers several products - including rumen-protected fats, slow release urea, selenium and direct-fed microbials - that can help alleviate the effects of heat stress in dairy cattle.

Find out more about Alltech and Alltech technologies at www.alltech.com

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©2019. Alltech, Inc. All Rights Reserved.

Formgioni, A., P. Pezzil, M. Tassinari,G. Bertin and S. Andrieu, (2005). Effect of yeast culture (Yea-Sacc®l026) supplementation on Italian dairy cow performance.

Proceedings of the 21s t Annual Symposium Nutritional Biotechnology in the Feed and Food Industries, (Suppl.1), Lexington. KY, USA. pp. 125.

Kravale, D. G. Bertinand S. Andrieu (2005). Effect of yeast culture (Yea-Sacc®I026 supplementation on Latvian dairy herd performance and economic impact Proceedings of the 21st Annual Symposium “Nutritional Biotechnology in the Feed and Food lndustries “, Lexington. KY, USA, May 23-25, pp. 126.

National Research Council. 1989. Nutrient Requirements of Dairy Cattle, 6th rev. ed., Washington, DC: National Academy Press.

Roth Z, Meidan R, Braw- Tal R, Wolfonson D. Immediate and delayed effects of heat stress on follicular development and it s association with plasma FSM and inhibin concentration in cows. . J Reprod. ln fertil. 2000;120(1):83- 90.

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Different Yeasts Different Results The difference is Yea-Sacc: • Improves feed efficiency by up to 6% • Healthy rumen pH • Contributes to 5-7 fewer open days

Alltech’s proven research on Yea-Sacc can drive your dairy’s efficiency to new limits.

Visit Alltech.com/on-farm-support for more information on heat stress.

Elizabeth Lunsford Territory Sales Manager elunsford@alltech.com (859) 553-0072

Alltech.com

AlltechNaturally

@Alltech

©2019. Alltech, Inc. All Rights Reserved.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Farm Bill Programs, Market Facilitation, Trade & More: May 2019

P

roducers are dealing with multiple issues that can at times be overwhelming. The impact the ongoing trade tension between the US and China has on markets, severe weather that continues to impact producers across the country, along with financial issues and the day-to-day challenges producers face has resulted in increased stress levels for many.

Congress passed a new farm bill late last year, but the program guidelines for administration of the various titles of the farm bill have yet to be written. The 2018 Farm Bill authorized the Dairy Margin Coverage (DMC) program, a voluntary risk management program that offers financial protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. It replaces the program previously known as the Margin Protection Program for Dairy. Sign up for this USDA Farm Service Agency (FSA) program is expected to open on June 17. USDA’s Farm Service Agency (FSA) announced early in May that the March 2019 income over feed cost margin was $8.85 per hundredweight (cwt.), triggering the third payment for dairy producers who purchase the appropriate level of coverage under the new DMC program. FSA also announced producers have access to a new DMC decision support tool [wws.govdelivery.com] as well as repayment options [links. govdelivery.com] for producers who were enrolled in MPPDairy.

The Trump Administration recently announced a second round of the market facilitation program is being developed to help offset the impact of the trade battle between the US and China.

The $16 billion aid package is being developed to assist farmers hurt by the retaliatory tariffs China has imposed, but it is unclear

exactly when the package will be ready to roll out. Details should be coming soon.

On the trade front, President Trump kickstarted the process for Congressional consideration of the US Mexico Canada Agreement (USMCA). The move at the end of May starts a 30-day clock for the Administration and Capitol Hill to come to an agreement on implementing legislation for the deal, after which there will be another 30 days for the White House to submit a bill to ratify the agreement. Canada and Mexico are the two largest trade partners for the US, and ratification of the trade agreement will be positive for agriculture. Ag groups are pushing Congress to move forward and ratify the agreement.

A concern is the recent announcement President Trump made that he would impose 5 percent tariffs on Mexican goods until Mexico took steps to stem the flow of illegal immigration to the US. This move could result in a response from Mexico that would complicate ratification of the USMCA.

Several parts of the country have experienced significant weather disasters this spring that are preventing planting, resulted in ruined commodities and hampered transportation of products. The US Senate recently passed a disaster assistance bill that would help producers and rural communities recover from the devastating weather events, but so far, the US House of Representatives has not followed suit. For many farmers in the mid-west, the recent weather has meant a near complete loss, and many may not be able to plant, or repair damaged infrastructure in time to have any production in 2019, let alone profitable production.

Producers needing further information on any of the issues discussed here can contact the Kentucky Farm Bureau Commodity Division at (502) 495-7738.

Southland Dairy Farmers welcome Haley Fisher as the new Mobile Dairy Classroom (MDC) Instructor for the state of Kentucky.

Haley graduated with a Bachelor of Science degree in Agriculture from Murray State University and a Master’s Certification in Organizational Leadership from Western Kentucky University. Her dairy roots run deep, as she grew up on her family’s dairy farm in Cave City, KY. During her free time, Haley enjoys volunteering with her church and 4-H youth and showing dairy cattle. Haley is looking forward to sharing the important message of dairy to the public.

Please help welcome Haley to the Southland Dairy Farmers Family as we know she will be a great addition to our MDC staff.

May - June 2019 • KDDC • Page 10

1. Barren 2. Logan 3. Adair 4. Christian 5. Warren

The top ďŹ ve milk producing counties:

7

89%

of all milk produced in 2018 was used and consumed in the form of uid milk

To learn more please visit thedairyalliance.com

operations during 2018 in the United States.

27th in milk production, 27th in number of milk cows, 37th in milk output per cow, and 14th in the number of licensed dairy

Kentucky ranked

gallons of milk per day

Dairy cows produced an average of

dairy cows

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Brought to you by the dairy farm families of Kentucky.

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milking cows

102

A typical Kentucky dairy farm has a herd of about

540 dairy farms

Kentucky has

Kentucky is home

gallons of milk per year

2,133

Each dairy cow in Kentucky provides an average of

*All facts are based on 2018 USDA and AGI data

$9.79

The average value of a day's milk per cow was about

$1,180

In 2018, a dairy cow in Kentucky cost about

gallons

117 million

The total amount of milk produced in the state amounted to

Kentucky

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Help Reduce Heat Stress Fabian Bernal M.S., P.A.S.

T

DeLaval Inc, Dairy Advisory Manager

he hot, humid months of the summer season can often take a toll on dairy cattle. Heat abatement strategies are important to plan for and implement in order to keep your cows cool and productive.

Adequate ventilation or cooling systems help reduce heat stress, increase or maintain milk yield, and improve the air quality in the barn. It is clear that we need to think about and understand air exchange rates, humidity, total gas dissolution, heat index, etc. However, it is also known that heat abatement needs have changed and have actually increased. The increased requirement of high-producing cows to dissipate a much higher heat load to maintain the normal body temperature is well recorded, and we need to pay more attention to those numbers especially from the profitability point of view. As an example, “cows producing 80 pounds of milk per day are producing 37,500 more kcal of heat (or 148,700 BTUs) per day than a cow producing 30 pounds of milk”. (Collier for Progressive Dairyman 02 April 2019). Failure to meet this need results in increased body temperature and heat stress of high-producing cows.

We now know that we need to address these requirements by understanding new efficiencies that can generate more signifi-

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May - June 2019 • KDDC • Page 12

cant cooling effects. We need to design our systems to work in larger areas, we need to push fresh, clean air through longer distances, and all of this has to happen while using less energy than conventional systems. So, how do we deal with this?

We understand the importance of monitoring the cow’s environment, specifically temperature and humidity. There are good ways to keep cows cool during the summer, such as including water and forced ventilation (fans), air conditioning, foggers, misters, and sprinklers in the barn. Plan protocols that include mechanical and physical heat exchange and evaporation are only one part of these scenarios. Therefore, our farm practices and protocols have to be considered as part of the heat stress mitigation plan.

In fast-paced dairies, cows rushed between pens or to the parlor can often experience compound stress. It is important that dairy producers include a section within their heat stress mitigation plan that takes into consideration compound stress. An example could be allowing extra time to move pens and animals at a lower speed while improving stockman skills. Holding pen management must also be taken into account, knowing that this is one of the maximum stress areas on a dairy farm, and can drastically affect dairy performance.

We also know that based on cow ranking, submissive cows use water troughs less frequently than their more aggressive partners. These cows consume less water and feed, and produce less milk with fewer components, especially milk fat. Social interactions such as this may be necessary for producers who group house their cattle and may have restricted watering areas or space. It is a good idea to plan for up to 20 percent more drinking water available during the hot summer months. It is essential to know that chilled water does not provide any additional benefit, while water above 86 degrees Fahrenheit may reduce consumption. Sometimes, having a different grouping strategy or eliminating overcrowding can solve some of the water consumption issues and improve the barn environment.

This is worth a second look.

As we gain a better understanding of cow behavior, producers are generally looking to enhance the cow’s environment.

Advanced air mixing systems, sensors, and even cow brushes typically are considered as a luxury item. However, increasing cow comfort is not just a luxury – start by keeping the environment as clean as possible, think of water accessibility, improve airflow by reducing “dead spots and understanding air exchange”, and finally, consider adjustments to some or your dairy protocols. It makes good business sense.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

KDDC Director and Allied Industry Corner KDDC’s Board of Directors is comprised of 21 members, 13 dairy farmers and 8 allied industry representatives. Dairy farmer directors represent the dairy producers within their respective districts. Allied industry members represent segments of the industry such as but not limited to, veterinarians, milk haulers and feed companies. The officers of the KDDC board include: President, Vice-President, and Secretary-Treasurer. The Executive Committee consists of the officers, the past president and an elected member at large. The president must always be a dairy farmer. When board meetings are held , there is one purpose in mind; to do what is best for Kentucky’s dairy farmers and its industry.

KDDC BOARD HIGHLIGHT

DISTRICT 12

John Kuegel Jr. is from Daviess County and is married to Leigh Ann Kuegel. They have two children; a daughter Johnna and son Josh. John representing KDDC’s District 12, grew up on the family dairy and has been involved in the dairy business his entire life. Currently, John and his family are milking 150 Registered Holsteins with the Old Lyndane prefix. John also farms 1000 acres of corn, soybeans and alfalfa, has been a delegate representing Kentucky at the National Holstein Convention and serves as a director to Farm Credit Mid America.

VISION: To create a vibrant and sustainable dairy industry in Kentucky.

MISSION: To educate, promote and represent dairy producers and foster an environment for growth of the Kentucky dairy industry.

GOALS: • To increase Kentucky dairy farmers’ profitability • To improve Kentucky dairy farmers’ competiveness • To enhance Kentucky dairy farm families’ quality of life • To assist in the sustainability of Kentucky’s dairy industry

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May - June 2019 • KDDC • Page 13

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Dixie Dairy Report June 2019 Calvin Covington

ccovington5@cs.com (336) 766-7191

Demand for dairy products. First quarter demand for dairy products (domestic and export), on a total solids basis, is almost the same as the first quarter of last year. However, domestic demand is up a strong 2.4% while export demand is down 12.4%. First quarter domestic demand is a new record high. Even though export demand is down compared to last year, it is still higher than 2017, and is the third highest on record. Lower export demand is primarily due to dry whey exports down 31% and whey protein concentrate exports down 43%. The African swine flu in China and now spreading to other parts of Asia is negatively impacting the whey market. Whey is a major part of the swine ration.

DAIRY DEMAND (1st quarter 2017, 2018, and 2019) – Total Solids Basis 2017

2018

2019

2019 vs 2018

(million lbs.)

Domestic Demand

5,914.4

5,986.6

6,129.1

2.4%

953.2

1,127.1

987.4

-12.4%

Total Demand

6.876.6

7,113.7

7,116.5

0.04%

Export % of Total

13.9%

15.8%

13.9%

Export Demand

SOUTHEASTERN ORDERS FLUID MILK SALES (1st quarter 2017, 2018, and 2019) Order

2017

2018

2019

2019 vs 2018

(million lbs.)

Fluid Milk Sales. Total fluid milk sales, for the first quarter of 2019, are 2.4% lower compared to the first quarter of 2018. Conventional sales, alone, are down 2.2%, while organic is 4.5% lower than a year earlier.

It appears plant based products are having a greater impact on organic milk sales. The decline in fluid sales continues to be low fat and skim milk.

Whole milk sales are unchanged from last year while flavored whole milk sales are up 25%.

In the three southeastern orders combined, fluid sales during the first quarter of the year are 3.7% lower than Southeast 1,135 1,111 1,052 -5.3% a year ago, as seen in the table. Even Total 2,667 2,643 2,546 -3.7% though Florida sales are only down 0.9%, sales from plants regulated under the Florida order are down about 2% while sales from plants outside of the order are up over 2.5%.

Appalachian

816

827

795

-3.9%

Florida

716

705

699

-0.9%

Milk production. April milk production is up 0.1% compared to last April. USDA reports 90,000 fewer cows this April versus last April. April dairy cattle slaughter was 7.9% higher than last April. For the year to-date, dairy cow slaughter is up 5.7%. In the 23 reporting states, production was up in 11 states, down in 11 states, and no change in one state. Texas continues to lead the way with higher milk production, up 6.7%. In the top two dairy production states, California and Wisconsin, April production was up 2.6% and 0.4%, respectively.

Southeast production. Of the 23 reporting states, Virginia continues to lead the way in declining production, down 11.0% in April. Production continues to decline in Florida as well, with April production down 5.5%. Virginia reports 9,000 less cows compared to last year, while Florida reports 7,000 fewer head.

Looking at federal order data, through the first four months of the year, total producer milk in the three southeastern federal orders is 6.8% lower than the same period last year. Most of the production decline is in the Appalachian and Southeast orders. Total producer milk, utilized in Class I, is 4.7% lower than a year ago. Combined Class I utilization is 72.5% through April, compared to 70.8% last year.

A number of factors point to milk production continuing to decline not only in the Southeast, but in many other parts of the country.

These factors include: low margins, less dairy cows as the result of more cows going to slaughter and more cows being bred to beef bulls, historically high number of dairy farms exiting the business, and weather challenges impacting the feed supply. Lower Southeast milk production resulted in a less challenging “flush” season this year. However, when August comes, due to less milk production, expect the opposite; a greater challenge in procuring supplemental milk.

Dairy product prices. Butter, cheese, and nonfat dry milk powder (NFDM) continue to advance. May is the first time the nonfat dry milk powder (NFDM) price has exceeded $1.00/lb. since January 2017. Reports indicate NFDM should continue to move higher.

Cheese is at its highest price since February 2017. Dairy Market News reports current cheese market tones as “wobbly”. The block to barrel spread has increased to over $0.20/lb. First quarter American cheese and other cheese disappearance is down 0.5% and 1.1%, respectively. Butter continues, as it has for over a year, trading in a narrow range. Butter imports, which are up 35% during the first quarter, are holding back further butter price increases.

May - June 2019 • KDDC • Page 14

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund DAIRY PRODUCTS SALES REPORT PRICES and CLASS I MOVER Product

May 2019

April 2019

May 2018

May2017

($/lb) Butter

$2.2952

$2.2669

$2.3382

$2.1644

Cheese (block & barrel)

$1.6974

$1.6468

$1.6353

$1.5390

Nonfat Dry Milk Powder

$1.0149

$0.9641

$0.7937

$0.8704

Dry Whey

$0.3784

$0.3923

$0.2711

$0.5094

June 2019

May 2019

June 2018

June 2017

Class I Mover (3.5% fat)

$17.07

$16.42

$15.25

$15.31

Class I Mover (2.0% fat)

$13.35

$12.74

$11.43

$11.89

($/cwt.)

Blend prices. For the first time in 18 months the Class I Mover exceeded $17.00 in June. Without the new Class I Mover calculation, the June Mover would have been $0.80/cwt. lower. May blend prices are projected $0.50 to $0.60cwt.higher than April.

For all of 2019 we now project blend prices to average $1.75 to $2.00/cwt. higher than 2018.

PROJECTED BLEND PRICES–BASE ZONES – SOUTHEASTERN FEDERAL ORDERS Month

Appalachian

Florida

Southeast

($/cwt. 3.5% butterfat) April (actual) 2019

$18.28

$20.46

$18.70

May

$18.99

$21.04

$19.24

June

$19.68

$21.54

$19.84

July

$19.55

$21.50

$20.12

August

$19.89

$21.85

$20.43

Milk Prices FMMO 5 www.malouisville.com May 2019 Class 1 Advanced Price (@3.5%BF) $19.82 June 2019 Class 1 Advanced Price (@3.5%BF) $20.47 FMMO 7 www.fmmmatlanta.com May 2019 Class 1 Advanced Price (@3.5%BF) $20.22 June 2019 Class 1 Advanced Price (3.5%BF) $20.87

May - June 2019 • KDDC • Page 15

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Kentucky Value-Added Conference July 9-10, 2019

Warren County Extension Office, Bowling Green, Kentucky Attendee

Company Name (optional)

Address

Phone

Return registration & checks (checks written to: KDDC): KY Dept of Ag - Eunice Schlappi 111 Corporate Drive Frankfort, KY 40601

Email

Others Attending

eunice.schlappi@ky.gov Phone: (502) 782-4122 Cell: (502)545-0809

Attendee

Email

Attendee

Email

Attendee

Email

= $30/person x # attending

May - June 2019 • KDDC • Page 16

= $100 table space – includes table space and (2) two-day registrations

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Tuesday, July 9 8:30 - 9:00

Registration

9:00 - 9:15

Warren Beeler / Welcome & Moderator

9:15 -10:00

Warren Beeler / Governor’s Office of Agriculture Policy Bill McCloskey / loans, energy grants, etc

10:00 - 10:30 Brent Lackey / KCard - business plans, products, market studies, etc 10:30 - 10:45 Break 10:45 - 11:15

Lewis Ramsey / Milk Safety - Kentucky Milk Safety regulations

11:15 - 12:00

Roger Snell / KDA Mktg - opportunities, cost share, marketing, etc

12:00 - 1:00 Lunch on site 1:00 - 1:30

Carl Chaney / Chaney’s Dairy Barn – agritourism

1:30 - 2:00

Elizabeth Lunsford / J R Chaney Bottling Co. – bottling milk

2:00 - 3:30

Producer panel: 10 minutes each “about our operation” / things we wish we had known from the beginning!

Kenny Mattingly Rachel Wade Willis Schrock Gary Beu

Kenny’s Farmhouse Cheese Ed Mar Cheese J D Country Milk WKU Creamery

3:30 – 3:45

Break

3:45 – 4:45

Ricky Gulley / cheese consultant – question and answer

4:45

Dismiss/dinner on your own / Optional tour of J D Country Milk - Russellville

Wednesday, July 10 8:15

Joe Cain / Welcome and Moderator / Kentucky Farm Bureau

8:30 - 9:15

Eric Goan / Bluegrass Dairy/Foods / getting started, food safety, SOP’s, CCP’s, etc

9:15 – 10:45

Producer panel: 10 minutes each “about our operation” / successes, stepping stones and pitfalls!

Bob & Angie Klingenfus Harvest Home Dairy Matthew Wade Middle TN State University Tim Mast Sunrise Dairy

11:15-12:15

Tour WKU Creamery

12:30-1:15

Lunch at Chaney’s Dairy Barn – on your own

1:15

Tour of Chaney’s dairy farm and milk bottling facility\

Hotel for Monday/Tuesday: Holiday Inn, Bowling Green (Wilkerson Blvd) – no room block Registration fee: $30 Sponsor tables in lobby: $100 (w/ 2 free registrations) Co-sponsored by: KDDC, KADF and KDA

May - June 2019 • KDDC • Page 17

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Strategies To Avoid Summertime Milk Fat Depression Jay Garmon, MSc, PAS

I

n today’s challenging milk markets the income from milk fat can be a big chunk of the total dollars coming into the farm.

There are certain seasonal fluctuations that play into it that cannot be totally eliminated, but we need to look at what we can control. As we head into the heat and humidity of summer in the mid south there are several influencers we can control.

Looking at causes of Milk Fat Depression (MFD) there are two major contributors: 1. Polyunsaturated fats(PUFA) in the diet (vegetable oils) 2. Rumen pH

The polyunsaturated fats in the ration are a normal component of dairy rations. The best approach is to try to keep these fats as low as possible. Most of the MFD prevention I will cover is directed toward maintaining rumen health and pH during heat stress. Lower pH will cause a microbial die off of bacteria in the rumen and can alter milk fat synthesis pathways. Lowering the pH or as sometimes referred to as Sub Acute Rumen Acidosis (SARA) can be addressed through several nutritional and management strategies.

So how do we keep the rumen and its population of microbes healthy and happy when it’s 99 degrees and 100 % humidity?

Cow comfort and cooling are critical parts to maximize dry matter intakes. Dry matter intakes are crucial to keeping the rumen working properly. I also want plenty of CLEAN quality water sources as this is the most over looked nutrient in the diet on many farms. I do suggest testing the water for both quality (i.e.coliforms) and mineral content. Ample space for cows to drink is very important in that 3-4 linear inches are available for each cow. Keep an eye on how quick these refill. I have seen low pressure systems that were a problem.

Use of good quality forages is always important, but it gains a new level of importance in the hot weather. Lower digestibility forages can have a huge negative impact on dry matter intakes.

Monitor quality closely to avoid molds that can have negative effects on health and productivity. Molds (seen or unseen) can affect rumen health and total health of the animal from a suppressed immune system.

Feed bunk management is another key part of the rumen health puzzle. Make sure you have enough bunk space available for all cows to eat without over competition enhancing problems.

Adequate physical effective fiber should be monitored

May - June 2019 • KDDC • Page 18

routinely and can be done with a Penn State Particle separator.

Understanding physically effective NDF fiber or “peNDF” and its role in rumen function is a good conversation to have with your nutrition professional. Cows need feed available a minimum of 22 hours a day.

TMR moisture should be in the 45-50% range. Remember with the use of fans that the moisture will change in the bunk and it can become drier and more easily sorted throughout the day. When cows sort out the smaller particles it will have a negative effect on rumen pH as with sorting the diet loses its “total mix” concept.

When it comes to feed additives we always look for “magic bullets” to offset some of the negatives of heat stress milk fat depression. There are things that help but won’t totally offset the problem without good management practices. I always look for those with university data and field proven studies that have a solid return on investment.

Adequate levels of buffer from both sodium bicarbonate and potassium carbonate sources are important to help keep SARA and even full blown acidosis at bay. Make sure they are from high quality sources as some cheaper and less bioavailable ones have shown up in various markets.

Direct Fed Microbials (DFM’s) have shown proven responses in maintaining rumen health during periods of stress. Yeast Cultures are one of the most proven feed additives on the market with a very solid return on investment. There is more than sufficient data and field experiences to support their usage.

Essential oils have shown some benefits in improving blood flow. As a cow gets hotter the blood vessels tend to constrict and these products aid in offsetting that problem and keeping her core body temp lower.

High Palmitic (C16) Bypass Fats have shown some promise in pushing fat production up. When entertaining using these look at digestibility of the fat as well as looking at cost and return on investment closely. Dr. Adam Lock at Michigan State University has done quite a bit of work in this area.

Good management is very important to keeping the rumen healthy and can’t be stressed enough. There are other tools we can use but we have to keep her cool, comfortable and maintaining dry matter intake to sustain desired milk fat production goals.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

USDA Announces March Income over Feed Cost Margin Triggers Third 2019 Dairy Safety Net Payment Dairy Margin Coverage Program Sign-Up Begins June 17

U

SDA’s Farm Service Agency (FSA) announced this week that the March 2019 income over feed cost margin was $8.85 per hundredweight (cwt.), triggering the third payment for dairy producers who purchase the appropriate level of coverage under the new Dairy Margin Coverage (DMC) program.

DMC, which replaces the Margin Protection Program for Dairy (MPP-Dairy), offers protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

The signup period for DMC opens June 17, 2019. Dairy producers who elect a DMC coverage level between $9 and $9.50 would be eligible for a payment for January, February and March 2019.

For example, a dairy operation that chooses to enroll an established production history of 3 million pounds (30,000 cwt.) and elects the $9.50 coverage level on 95 percent of production would receive $1,543.75 for March.

Sample calculation:

• $9.50 - $8.85 margin = $0.65 difference

• $0.65 x 95 percent of production x 2,500 cwt. (30,000 cwt./12) = $1,543.75

DMC premiums are paid annually. The calculated annual premium for coverage at $9.50 on 95 percent of a 3-million-pound production history for this example would be $4,275

Sample calculation:

• 3,000,000 x 95 percent = 2,850,000/100 = 28,500 cwt. x 0.150 premium fee = $4,275 The dairy operation in the example calculation will pay $4,275 in total premium payments for all of 2019 and receive $8,170 in DMC payments for January, February and March combined.

Additional payments will be made if calculated margins remain below the $9.50/cwt level.

All participants are also required to pay an annual $100 administrative fee in addition to any premium, and payments will be subject to a 6.2 percent reduction to account for federal sequestration.

Operations making a one-time election to participate in DMC through 2023 are eligible to receive a 25 percent discount on their premium for the existing margin coverage rates. For the example above, this would reduce the annual premium by $1,068.75.

About DMC

On December 20, 2018, President Trump signed into law the 2018 Farm Bill, which provides support, certainty and stability to our nation’s farmers, ranchers and land stewards by enhancing farm support programs, improving crop insurance, maintaining disaster programs and promoting and supporting voluntary conservation. FSA is committed to implementing these changes as quickly and effectively as possible, and today’s updates are part of meeting that goal.

USDA Announces New Decision Tool for New Dairy Margin Coverage Program

U

SDA announced the availability of a new web-based tool – developed in partnership with the University of Wisconsin – to help dairy producers evaluate various scenarios using different coverage levels through the new Dairy Margin Coverage (DMC) program.

The 2018 Farm Bill authorized DMC, a voluntary risk management program that offers financial protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. It replaces the program previously known as the Margin Protection Program for Dairy. Sign up for this USDA Farm Service Agency (FSA) program opens on June 17.

The University of Wisconsin launched the decision support tool in cooperation with FSA and funded through a cooperative

agreement with the USDA Office of the Chief Economist. The tool was designed to help producers determine the level of coverage under a variety of conditions that will provide them with the strongest financial safety net. It allows farmers to simplify their coverage level selection by combining operation data and other key variables to calculate coverage needs based on price projections.

The decision tool assists producers with calculating total premiums costs and administrative fees associated with participation in DMC. It also forecasts payments that will be made during the coverage year.

For more information, access the tool at fsa.usda.gov/dmc-tool.

For DMC sign up, eligibility and related program information, visit fsa.usda.gov or contact your local USDA Service Center.

Information pulled from Kentucky FSA Newsletter May 2019

May - June 2019 • KDDC • Page 19

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

The 4 F’s: Bear Grylls On Failure, Fear, Fire And Faith

B

Cait Brown, Alltech

ear Grylls has remarked that “life is an adventure that is best lived boldly.” As a former British Special Forces serviceman, a well-known TV adventurer, a survival expert and an accomplished author, Grylls is clearly embracing his own advice. He took the stage at ONE: The Alltech Ideas Conference (ONE19) to outline the four things that have forged him into the success he is today.

Accepting failure Grylls noted that failure was likely the most important force behind his accomplishments, revealing that the first time he attempted to become a member of the elite Special Air Service (SAS), he failed and was sent back to his unit. At the time, he thought not making it meant he wasn’t fast enough, smart enough or simply good enough, but nevertheless, he decided to try again.

Grylls remarked that he felt completely out of place among the huge, muscle-bound soldiers also attempting to join the special forces unit, and he began to worry he’d volunteered for something that was beyond his capabilities. He soon realized, however, that SAS selection was about both physical capacity and mental resilience and that, although he might be average in stature, he was mighty in spirit.

“My failures far outweigh my successes,” said Grylls. “The failed expeditions, projects and near-death moments still haunt me in the night sometimes.”

Grylls went on to say that it was actually these failures that eventually helped him to grow stronger, both inside and out: “There is no shortcut to avoid failure,” he said. “Failure is a doorway to success.”

Facing your fears The second pillar Grylls addressed was fear, noting that “life is scary sometimes, and all of us face battles, even if (they’re just) battles of confidence and nerves.” He added that it’s a universal truth that life will test us, no matter who we are.

“Life doesn’t always just reward the brilliant or the talented,” he said. “Life doesn’t really care about the exam results or good looks or the letters after someone’s name. Life rewards the dogged, the determined — those who can walk toward their goals despite their fears.”

When it comes to facing fears, Grylls speaks from experience.

In 1996, at the age of 21, his celebrity — and life as he knew it — was almost impeded when a skydiving adventure went terribly wrong. After jumping out of a plane with a few friends over Zimbabwe, his parachute became tangled and failed to inflate properly. Grylls desperately tried to remedy the problem by pulling on his steering toggles, but to no avail. He was descending so rapidly that, by the time he realized what terrible trouble he was in, he was too close to the ground to use his reserve chute. He

May - June 2019 • KDDC • Page 20

ended up plunging toward the earth in a freefall, landing on his reserve parachute pack and breaking his back in three places.

Though his spinal cord was very nearly severed, it remained intact. He spent the next year as an invalid, undergoing grueling rehabilitation and enduring night terrors about falling and being out of control. Still, he remained unfailingly determined and, a mere 18 months later, Grylls accomplished a lifelong dream by becoming the youngest British person ever to reach the summit of Mount Everest.

“You might wonder if I’ve ever jumped again,” he said, “and the answer is: all of the time.”

While he admitted that he dreads jumping, Grylls also said that he knows that the answer to fear is to face it head-on.

“Life has repeatedly shown that, when we edge toward our fears, they often melt away,” he said. “I really struggle with rooms full of strangers. I think this is because I know I’m not actually as strong as people might expect, but that’s okay, because we all have our stuff — fears are just part of life, part of what makes us real and relatable.

“In life, those cracks we all have are really our stories; like wrinkles, each one is a story, an adventure,” Grylls continued.

“The big moments in all of our lives really leave marks and, if I’m being honest, I’m completely covered in marks.”

Finding the fire When outlining how we can keep moving forward against the odds, Grylls said that it comes down to learning how to access our inner fire.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund “You must first understand that no one is really brilliant or brave all of the time,” he argued, recalling an encouraging quote from one of his commanding officers in the military: “When not one ounce of you thinks you can, you’re the one that turns around and gives that little bit extra.”

According to Grylls, inner fire is simply a trigger to “give more when most people want to give up.”

“If you dig, you will find it,” he added. “The fire is always there.

Sometimes in life, the fire gets a little hidden; in fact, sometimes it’s just a little ember — but it’s always there, and it can change everything.”

In the course of his trek up Mount Everest, Grylls said the mountain claimed four people’s lives; two died from exposure and the others fell to their demise. They’d been climbing for more than 55 days, in negative-40-degree temperatures, with the peak of the mountain looming above. Grylls was completely exhausted and felt that every step forward was followed by a backward slide. He was no longer sure he could reach the summit, and he admits there was a voice in his head that kept telling him, “You don’t belong here. Give up.” However, instead of slowly bowing to that voice as he was initially inclined to do, Grylls found his inner fire and kept going.

“This fire has been (my) most valuable weapon — not talent, not skills,” he said. “Know the power of unrelenting, unwavering resilience. The storms of life, ironically, make us strong. As with all dark nights, sometimes you’ve just got to hang in there, doggedly. The dawn will always come. The light will always win.”

Keeping the faith While on Mount Everest, Grylls also found the voice of doubt in his head being silenced and drowned out by a stronger one, one that was difficult to describe but that said: “I’m with you. Lean on me. You can do this.” This was when he realized that faith in oneself and in others is the universal force of goodness.

“We all face our mountain,” said Grylls. “Everest really is just a state of mind.”

We Raise 5l (j{ass To Tlie Dairy Janii{y

To tfie corn y{anters, feed mixers, cow mi{kers and calf raisers.

To tfie kid sfiujJ{ers, yart yick-er-uyyers, and mea{ yreyarers.

J-fere 's to you, tfie dairy men and women tfiat work tireless{y to tend to tfie {and; suyyort tfie yeoy{e and care for tfie cows.

Achieving your dreams, Grylls continued, will mean embracing your failures along the way.

“I am no hero, and I’m no stranger to crippling doubt and fear, but I know the weapons that serve me best,” he said. “They come from within, not without.”

In closing, Grylls argued that the final element to success is about finding true wealth, which stems from being both grateful and kind.

“I’ve climbed mountains with men who have lost their legs in war, but yet, they still smile and are grateful — (they say) look at all we have and all we’ve done,” said Grylls, who added that we must seek humility and understand our place in the universe.

“Our real wealth is always going to be found in our relationships,” Grylls continued. “It’s about the simple things that keep us moving through the dark nights that we all face from time to time.”

Grylls’ final remarks served as a simple note of inspiration, “Remember: you are made amazing. Stand tall, and never give up.”

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May - June 2019 • KDDC • Page 21

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Dairy Revenue Protection

New Risk Management Tool for Kentucky Dairy Farmers Todd Gibbs, Agency Relationship Manager, AFBIS, Inc., Lexington, KY

W

hen Mr. Zippy Duvall was elected President of the American Farm Bureau Federation (AFBF) in January 2016, a top priority was to review how 2014 Farm Bill programs were working and identify potential improvements for the next Farm Bill. This effort was spurred by the poor farm economy and led to the creation of AFBF’s farm bill working group. The working group identified that dairy farmers needed a new and more effective risk management tool. Within the structure of the current federal crop insurance program the group sought to protect the revenue of milk sales from dairy farms and put more emphasis on the value of a farm’s milk.

With the assistance of American Farm Bureau Insurance Services (AFBIS) and Dr. John Newton, Chief Economist at AFBF, Dairy Revenue Protection was introduced to the dairy community on August 8, 2018, and the first endorsement was sold on October 9th, 2018 (the first day endorsement sales were allowed). As we fast forward seven months, 7400 endorsements have been purchased by dairy farmers and nearly 24 billion pounds of milk have been insured. Let’s take a closer look at the policy itself..

There are two options when purchasing an endorsement. The first is Class Pricing whereby we utilize a three-month average of Class III or Class IV milk (or a mix of the two) directly from the Chicago Mercantile Exchange. An endorsement is one quarter in length and a producer can purchase an endorsement(s) for five consecutive quarters – up to 15 months out. As an example, XYZ dairy farm typically produces 1,000,000 lbs. of Grade A milk over a three-month time period. Utilizing real-time data, the next quarter for purchase is July – September with sales available daily until June 15th, which would be the final day coverage can be purchased for that quarter. On Tuesday, May 21st, Class III and Class IV milk, closed at $16.90 and $17.11 per cwt on the CME (as an average for July, August, and September futures). Utilizing the DRP quoting tool with a 50/50 mix between the two, we can build a cost and coverage quote for this Kentucky dairy farm.

Under this scenario on this day, the Class Pricing endorsement yielded an expected revenue insurance guarantee (for 1,000,000 lbs. of milk covered) of $161,548 at 95% coverage ($161,548 = $17×1,000,000×95%÷100). The total premium is $751 but being a federal crop insurance program, it is subsidized by 44% bringing the actual producer cost to $421 or 4.2 cents per cwt of milk covered.

The second endorsement option is called Component Pricing and the coverage and quoting mechanics are like the Class Pricing endorsement with the difference being we are now focused upon CME butter (butterfat) and CME cheese (protein) futures. The

May - June 2019 • KDDC • Page 22

third part is called “other solids,” but that is a fixed number within the endorsement. To quote this endorsement, the producer shares both the butterfat and protein levels he/she expects from their dairy in the quarter attached to the endorsement. Utilizing the same dairy characteristics from above, we are going to quote a Component Pricing endorsement utilizing CME data from May 21st. We are going to once again assume we are purchasing an endorsement for the July – September quarter for 1,000,000 lbs. of milk and that the producer has provided butterfat and protein numbers (representative of their dairy) of 4.2% and 3.3%, respectively. Under this scenario, the Component Pricing endorsement yielded an expected revenue insurance guarantee (for 1,000,000 lbs. of milk covered) of $185,118 at 95% coverage. The total premium is $1,427, but it is subsidized by 44% bringing the actual producer cost to $799 or 7.9 cents per cwt of milk covered.

Some more important characteristics of DRP are:

1. In order to purchase an endorsement, a separate application must first be on file with an Approved Insurance Provider (ex.

AFBIS).

2. Billing for an endorsement will be no earlier than 25 days after the quarter that was purchased. In our above example, October 25th will be the earliest billing date for the July – September quarter.

3. If a dairy typically produces 1,000,000 lbs. of milk per quarter, he/she is not obligated to allocate the entire amount to just one endorsement. They could purchase multiple endorsement within the same quarter on different dates if they are not covering the same milk.

4. For loss purposes, we will compare your expected guaranteed revenue (when the endorsement is purchased) to your actual revenue (after the quarter is over). If there is a revenue loss, we will ask for your milk marketing records as verification of lbs. of milk delivered and actual butterfat and protein levels (if your endorsement was Component Pricing).

If you have questions, please contact me at the email provided below. In addition, the following Kentucky Farm Bureau Insurance agents are Dairy Revenue certified and can assist you with an application and/or endorsement.

John Delong, Mt Olivet, 606-724-5812 Nathan Franklin, Shelbyville, 502-633-2310 Josh Harden, Glasgow, 270-629-5555 Charles Monin, Lebanon, 270-692-3281 Gavin Roberts, Owensboro, 270-926-9600

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Allied Sponsors

S P E C I A L T H A N K S T O O U R S P O N S O R S

PLATINUM Ag Central Alltech Cowherd Equipment CPC Commodities Bluegrass Dairy & Food Burkmann Feeds Dairy Farmers of America Farm Credit Mid-America Kentucky Department of Agriculture Kentucky Farm Bureau Kentucky Soybean Board Zoetis GOLD Arm & Hammer Animal Nutrition Chaney’s Dairy Farm Dairy Express Services Dairy Products Association of KY Elanco IDEXX Kentucky Nutrition Service Land O’Lakes Mid-South Dairy Records Owen Transport Select Sires MidAmerica (KABA) Todd Co. Animal Clinic Trenton Farm Supply SILVER Afi Milk DCC Water Beds Grain Processing Corp.

KVMA Luttrull Feeds Prairie Farms Purina RSI Calf Systems Southland Dairy Farmers BRONZE ABS Global Advantage Hoof Care Bagdad Roller Mills Central Farmers Supply Double “S” Liquid Feed Genetics Plus H J Baker Hinton Mills Kentucky Corn Growers Lallemand Limestone & Cooper Maryland & Virginia Milk Producers Provimi Smith Creek, Inc Wilson Trucking

May - June 2019 • KDDC • Page 23

Non-Profit US Postage PAID

176 Pasadena Drive Lexington, KY 40503 859.516.1129 ph www.kydairy.org

Calendar of Events JUN 20 Tri - County Farm Day, Trenton Farm Store, Todd Co. JUN 21-22

Western Rivers Kentucky Jr, Livestock Expo.

William “Bill” Cherry AG/Expo, Murray, KY

JUN 22

Marion Co. Dairy Show and June Dairy Day, Lebanon, KY, 10:00 A.M.

JUN 25

Organic Association of Kentucky Field Day, Durham Farms, Crofton KY 9:30 CDT

JUN 28

Kentucky Showmanship Clinic, Casey Co. Fairgrounds, 9:15 A.M.EDT

JUN 29

Liberty District Dairy Show, Casey Co. Fairgrounds,8:00 A.M. EDT

Shelby Co. District Dairy Show, Shelby Co. FairJUL 02 grounds 8:00 A.M.EDT JUL 7-11 Southeast Dairy Retreat, Virginia Dairy Value - Added Conference, Warren Co. JUL 9-10 Extension Office JUL 10 Kentucky State Fair Livestock Entry Deadline JUL 11

Mammoth Cave Area Dairy Day, Jelly Stone Park, Cave City KY 10:00 A.M.CDT

JUL 11

Horse Cave District Dairy Show, Burley Fields Livestock Center, 9:30 A.M. CDT

JUL 17

Tollesboro District Dairy Show, Tollesboro Fairgrounds

JUL 19

KDDC Board Meeting, Nelson Co. Extension Office, 10:00 A.M. EDT

JUL 22

Prairie Farms Ice Cream Social, Adair Co. Extension office, 7:00 P.M. CDT

JUL 26-27

Kentucky Junior Livestock Expo., L.D. Brown Ag. Center, Bowling Green, KY

AUG 14

KY State Fair Youth Pizza Party, KFEC, 7:00 P.M. EDT

AUG 15-18

KY State Fair 4-H, FFA and Open Dairy Shows, KFEC

AUG 16 Dairy Youth Cheese Auction, KFEC AUG 22 AUG 27-29

Kentucky Farm Bureau Ham Breakfast State Fair South Wing 7:00 A.M. EDT Kentucky Milk Conference, Lake Barkley State Park, Cadiz KY

SEP 6

CPC Fall Field Day Fountain Run, KY 9:00 A.M. CDT

SEP 17

PA. All – American Invitational 4-H Dairy Judging Contest, Harrisburg, PA.

SEP 28

Eastern Kentucky University Agriculture Day at the EKU v. TSU Football Game, 6:00 P.M.